JOHN McDonnell has defended his plans for a 10 per cent workers' shareholding in UK companies, denying they would result in less investment.

The Shadow Chancellor took to the airwaves to promote Labour’s new plan, saying: "If you look at other economies, like Germany, where there's been much more worker involvement, it's been the reverse.

"You get more investment, you get longer-term decision-making and you have a growing economy. This is nothing unusual. It happens in other countries and it has proved to be successful."

But Carolyn Fairburn, the CBI Director-General, said Labour's plans would hit share prices and cause investment to "flee" the country.

She told BBC Radio 4's Today programme: "Take steps like this and we will set the clock back, investment will flee our country and, whatever Labour say about this, the outcome will be one that reduces pay in people's pockets."

Meanwhile, Mr McDonnell said Jeremy Corbyn should be succeeded by a woman. Conference is expected to back a rule change to create having a female deputy leader to work alongside the current deputy Tom Watson, leading to speculation that when Mr Corbyn stands down, he will be succeeded by a woman.

The Shadow Chancellor told Today: "The next leader of the Labour party has to be a woman."

Changes to rules governing leadership elections and selection of MP candidates have been approved at conference.

Members and unions voted 63.94 per cent for and 36.06 per cent against the changes to the leadership rules and 65.32 per cent for and 34.68 per cent against the changes to selection of MP candidates.

Under the reselection rule change, the threshold to force sitting MPs to fight open selection battles will be cut from 50 to 33 per cent of local branches or affiliated unions.

Labour MPs currently face a so-called "trigger ballot" before each general election but must fight against other contenders for the candidacy only if a majority of local branches and affiliated unions back an open selection contest.

The new change will require an open contest if either 33 per cent of local party branches or 33 per cent of affiliated trade union branches demand one.

The rule change for future leadership contests does not alter the 10 per cent threshold for the number of MPs' nominations which a candidate must gather to get on to the ballot paper but also requires would-be leaders to secure nominations from fiver per cent of constituency parties or five per cent of members of trade unions or affiliated organisations.